Word: mergers
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Dates: during 1990-1999
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...bold architects of the $33 billion deal, the largest communications merger in American history, with prospects of creating a corporate colossus extending telephone and cable-television wires into roughly one out of every four American households, simply got cold feet. And it was more than government regulations that pulled them apart. The price of their stocks was plunging, and doubts about the economic wisdom of the merger were on the rise. And the deal may have been too big and too hasty. Wall Street reacted with a 51.78-point drop in the stock market on Thursday...
...merger had been tottering for weeks. Three deadlines for a definitive agreement had already come and gone. The big problem was the slumping value of Bell Atlantic stock, which had dropped from 67 5/8 on Oct. 14 to 52 3/4 the day the deal collapsed. That was uncomfortably below the $54 a share that Bell Atlantic had pledged to pay for TCI. Malone, whose personal stake would have been worth more than $1 billion under the merger agreement, demanded more Bell Atlantic shares to offset the decline in price. But Smith, who noted that issuing more stock would dilute...
Cultural differences between the two companies also aroused a measure of distrust. After the merger agreement in October, Malone presented Bell Atlantic with a list of 23 questions about its management and policymaking methods. Would, for example, the phone company consider cutting its dividend in order to plow more money into capital investment? Bell Atlantic wouldn't hear of it; like other big utilities, the firm considers large and steady dividends to be an important feature of its stock. Smith had at least 40 questions of his own. Could TCI deal with the intense level of regulatory scrutiny that Bell...
Despite the troubles, the two sides were close to bridging their differences shortly before the deal blew up. "I talked to John as late as Monday night," says John Hendricks, chairman of Discovery Communications, which operates the Discovery Channel and Learning Channel. "At that point the merger was on. There was some relief in his voice that they had finally arrived at a deal." The broken alliance may indeed slow the construction of a nationwide information system, but very few experts expect that it will stop it. Other cable firms and telephone companies continue to move forward with combined ventures...
...start talking again to Viacom. The upshot: Viacom finally agreed to a revised collar that would compensate Blockbuster shareholders for any drop in Viacom stock over a one-year period. That satisfied Blockbuster, which had originally insisted on compensation for any stock drop at the closing of the merger...